Experience Matters, But It's Not Enough: Rethinking the Value Creation Toolkit

The recent wave of global disruptions underscored a stark reality: agility has moved beyond buzzword territory and into the realm of survival and long-term success. Private equity firms are responding, making operational excellence a priority.

But what truly sets today's successful operating teams apart?

Seasoned operating professionals have weathered storms before. They offer invaluable pattern recognition, understanding the core drivers beneath seemingly novel crises. However, this must be married to adaptability. Today's challenges aren't carbon copies of the past; they play out against a backdrop of unprecedented technological disruption and geopolitical uncertainty.

The core principles of business process reengineering remain sound, but operational teams must embrace a broader toolkit to drive value within today's portfolio companies:

• Data-Driven Decision Making: Data analytics has moved from 'nice to have' to foundational. Teams need proficiency in using data to combat everything from inflation-based pricing pressures to identifying inefficient supply chain practices.
• Technological Fluency: Operational leaders need an understanding of how emerging technologies can disrupt or enhance their portfolio companies' industries. Evaluating AI tools, sustainability technologies, and process automation platforms are becoming core skills.
• The Human Side of Change: Even the most brilliant process redesign is useless if it's not adopted. Effective operating teams excel at building buy-in, communicating the 'why' behind transformations, and collaborating closely with portfolio company leadership to ensure a smooth rollout.

The Importance of Networks & Ecosystems

While expanding in-house operational teams is a priority for many PE firms, few expect to become experts in all things. Cultivating a robust network of external advisors remains vital.

The Key? Building a network that offers genuine niche expertise in specific industries or emerging technological fields. This is particularly valuable for smaller or first-time funds.

The Heart of BPR in a New Era

Here's where business process reengineering's fundamentals shine brighter than ever:

• Question Everything: Avoid band-aid solutions - a truly agile team dares to challenge the entire foundation of a process, seeking radical improvements, not incremental ones.
• Customer Centricity: Internal operational improvements should always be traced back to their impact on the customer journey or overall value proposition.
• Harnessing Technology: The difference is that today's operating teams must be prepared to continuously evaluate and reevaluate process changes in light of ever-evolving technology. Agility means not just implementing the shiny new tool, but iterating on its use with an eye on emerging trends.

I'm eager to hear from other PE professionals and seasoned operating executives:

What skills, tools, or mindsets do you think are missing from this list when it comes to building truly exceptional, future-ready operational teams?